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ANYONE WHO HARBORED ANY HOPE THAT THE trusty consumer would swoop in and save the day for the U.S. economy can pretty well put that notion to rest.

William Waitzman

Not only are soaring oil and food prices weighing heavily on confidence, things also have gotten so bad that consumers, maxed out on their housing ATMs, are increasing their use of credit cards and decreasing their use of debit cards for such mundane purchases as gas and food.

That's according to Richard K. Davis, chairman and CEO of U.S. Bancorp, who gave a recent presentation about his company and was quoted in American Banker as saying that economic-stimulus checks, far from being used to pay off debt, are being used to "get through life." Though credit cards accounted for just 7% of the bank's first-quarter loan portfolio, they represented one-third of its charge-offs.

That sad state of affairs was confirmed last week by the American Bankers Association. It said a number of loan categories showed an increase in the percentage 30 days past due in the first quarter, with bank credit-card delinquencies rising to 4.51% from 4.38% at the end of 2007. The ABA's chief economist said he expected food and gas would keep delinquencies at an elevated level.

Several recent surveys showed consumers pulling in their horns. Deloitte found that 75% of consumers were buying only the apparel and shoes needed by their families, while a poll conducted by Zogby International for Marlin found 41% of U.S. workers cutting back on utilities, and nearly half on food.

"The U.S. consumer no longer has anywhere to hide," said a recent note by CitiFX Technicals.

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Pain in the Payrolls

U.S. employers, pressured by rising costs and slow growth, cut their payrolls in June for a sixth straight month, this time by 62,000. The Labor Department also lowered the previous two months' total by 52,000 jobs. The unemployment rate held steady at 5.5%. Separately, the Institute for Supply Management reported that the service-sector jobs index plunged to 48.2 in June, signaling an economic contraction, from an expansionary 51.7 in May.

March of the Bear Markets

The Dow Jones Industrial Average officially entered bear market territory in a holiday-shortened week, down 20.3% from its October record close, and falling 0.5% on the week, to 11,288.54 points. The Nikkei Stock Average in Japan racked up 11 consecutive trading days of losses, its longest losing streak since pricing history is available from Thomson Datastream. Surging oil, inflation concerns and slowing growth were blamed.

Zach Trenholm

He Said:

"The era of cheap oil is over. [The world] will end the 21st century without oil."

So What Else Is New?

Oil futures continued their seemingly inexorable rise, reaching a high near $146 a barrel and settling at $145.29, up nearly 4% on the week. Concerns about supply, conflict with Iran and Saudi Arabia's suggestion that output wouldn't be raised helped push black gold to its fifth record close in six sessions. Russian energy giant Gazprom forecast $250 oil "very soon." Oh, great.

Sweet Vindication

A New York state appeals court ruled that former New York Stock Exchange CEO Dick Grasso can keep his $187.5 million salary package, ending a four-year battle begun by former Gov. Eliot Spitzer who was then attorney general and the bane of Wall Street.

More Capital, Please, Sir

A research report by Keefe Bruyette & Woods estimated banks would need up to $30 billion in new capital to cover a further sharp downturn in credit performance. Meanwhile, Standard & Poor's cut its outlook on diversified banks and other diversified financial-services firms to Negative from Neutral, and warned some may need to cut dividends and raise more capital to cover rising loan losses.

The Numbers

JPMorgan Private Bank's survey of 350 clients with at least $25 million of investable assets found indecision about money: 26%: share of respondents who said they had no idea how much money to leave the kids 6%: percentage of those surveyed who never signed a will 10-13%: nearly half of the respondents said this was the return they expected from trusts 38%: share of respondents who said financial predators were the greatest fear for their beneficiaries, more than squabbling

One and Done?

The European Central Bank, as expected, raised its key interest rate by a quarter percentage point, to 4.25%, its first move in over a year, but signaled serial increases weren't likely. ECB President Jean-Claude Trichet's said he had no bias, which helped lift the long-suffering greenback against the euro. And Treasury Secretary Henry Paulson said near-term economic conditions were difficult, and the threat of global inflation is serious.

Next Stop, Prison

Fugitive former hedge-fund manager Samuel Israel III turned himself in after surviving what he said was a suicide attempt. Israel, who rode a scooter to surrender at a Massachusetts police station, was ordered to begin serving his 20-year term immediately, and to forfeit his $500,000 bail.